Golden Nugget’s land-based casino revenue market share was only eight percent in 2016. However, its online gambling revenue market share was a much larger 21.5 percent, as seen in the charts below.
* Market share data doesn’t include Trump Taj Mahal’s 2016 revenue.
In 2017, Golden Nugget has continued to surge and now possesses a plurality of the online gaming market: 28.4 percent in March 2017. The next closest online operator is land-based juggernaut Borgata, which clocked in at 20 percent in March.
This divergence isn’t limited to Golden Nugget and Borgata, and it raises a key question: How important is a casino’s land-based brand in the online realm?
If New Jersey is any indication, a strong brand will set properties up for success.
Out of the gate, Borgata and Caesars were able to capitalize on their strong, well-known brands.
They did this by leveraging their large customer databases and marketing budgets. Not surprisingly, both casinos jumped out to quick leads in the NJ online casino market.
Over the first year, a casino’s placement in the monthly online revenue report pretty much lined up with where it fell on the state’s land-based revenue lists. Of the still-open casinos, Borgata was out in front, followed by Caesars (which was greatly helped by having three casino brands in the market), then Tropicana, and then Golden Nugget.
But three years in, the landscape has undergone a major shift. The top online revenue generators no longer line up with the top land-based casinos.
Now, it’s Golden Nugget out in front, with Resorts nipping on the heels of Borgata.
Things get even more interesting when we use land-based revenue as a baseline for what a casino’s online market share should look like. Viewed this way, the top two land-based casino operators in Atlantic City are significantly underperforming online, while the bottom two land-based casinos are significantly over-performing.
|2016 B&M Market Share*||2016 Online Market Share||Differential|
|Three Caesars casinos||39.8%||19.7%||-20.1%|
* Market share doesn’t include Trump Taj Mahal’s 2016 revenue.
How did this happen?
Other than the standard improvements all of the New Jersey online gambling sites have made, the online products from Tropicana, Caesars and Borgata haven’t changed much since the initial launch in November 2014. In fact, the only major change in that time was the addition of the Pala brand under Borgata.
Borgata has more or less relied on its brand and trusted its early decisions — from partnerships to marketing.
On the other hand, Golden Nugget hasn’t been idle, adding two strong brands in the wayward Betfair online casino and Philadelphia-based SugarHouse Casino. Golden Nugget has also:
The chart below clearly shows how Borgata leveraged its brand to jump out to a quick lead, but also how Golden Nugget was able to eventually catch up, as Borgata’s more conservative approach caused it to level off.
Resorts also took some risks. It launched very late, patiently waited for one of its partners, PokerStars, to receive a license. Since that time, it’s launched a first-of-its-kind iGaming Lounge, added a second casino brand in Mohegan Sun, and is said to be exploring both virtual sports and live dealer games.
Based on their performances, the riskier behavior by Golden Nugget and Resorts has paid off.
The ubiquity of the internet allows small casinos in far-flung locations to compete with the big boys. This dynamic likely explains why the biggest casinos in California and Pennsylvania are only interested in online gambling if it’s done largely on their terms.
A strong online presence requires a dedicated team and a good product. An online operator that possesses both of these things can negate the advantages that Philadelphia’s Parx Casino possesses. Because of this, there is little reason for Parx to support online gambling in the state unless it can get a few favorable concessions.
Parx’s massive player database, its recognizable brand, and its easy access to major population centers are helpful and will likely shoot it to the front of the pack if and when online gambling launches in Pennsylvania. (The “if” becomes a larger part of the equation with each passing day.)
At the same time, Parx has seen online gambling play out in neighboring New Jersey. It knows it can’t rely on these things alone, or it will likely suffer the same fate as Borgata.